Contribution-based Economy

Introduction

Conventional money plays multiple roles. The first and obvious role is the resource-accounting one. The notion of money had emerged from the necessity to exchange goods. Thus, a numerical value must have been attached to any quantity of any good, so that it could be fairly exchanged to other goods. The value mostly reflects the number of resources spent to produce/generate a product. Such a role of money, will probably never go away. Even for artificial intelligence, there will be a necessity to account resources, it is inevitable.

However, right after their ingenious creation, the money started exhibiting other functions besides their primary resource-accounting role. How is that possible, that a little painting, which took no more than a $1000 of resources to be produced, including the raw labor of a painter, is sometimes bought for millions of dollars? Obviously, such price has other components besides the resource-accounting. Let us, for now, name all other roles “emotional”. The human emotions are involved in such price developing.

The resource-accounting part can be fully computerized. It is easy to count all resources spent on any product produced and we can completely pass this work to computers.

Can we separate the emotional part from the resource-accounting part of the money? This is how we arrive at a notion of multi-dimensional money. The first dimension, resource-accounting can be assigned to computers to handle. Other dimensions should be left to humans to be managed. Without powerful computers such a separation is unthinkable. Let us name money of the past as “combined” or “aggravated” money.

Optimization of profit was the only feasible option for aggravated money of the past.

What can we optimize instead of profit? Achievements? A quantity of goods produces per person? Many answers natively coming into mind become merely a substitution of the profit one way or other after a careful consideration. Is there anything qualitatively different that we can try? Some say “Quality of Life” – sounds a bit better.

There is one answer, which nobody would probably dissent: “The Love”. However, it sounds hopelessly romantic, utopian, and totally unquantifiable. How would we measure Love? What is a “unit” of Love? Those questions can most likely never be answered. However, it does not have to be Love explicitly, it can be some quantifiable characteristic, optimizing of which will lead to increase of love in our life. If we find something like this, it would suffice, even for the future artificial intelligence.

Having recorded all the transactions of each person on the Earth for the duration of the whole life, would not we get enough data to compute some quantity, which would reflect how much that person is loved and valued by others? Let us name such quantity as “Contribution Index”, for example.

The details of how to compute contribution index comprise the primary subject of Contribution-based Economy.

Basic Description of Contribution-based Economy

Contribution-based Economy (referred as “C-Economy” below) preserves the well-working functionality of the contemporary monetary system and introduces the new notion of Contribution Index (CI) to facilitate fair and reasonable distribution of goods and resources. CI replaces profit as an incentive and gets computed for each person and company. The scarce products and resources get distributed based on the value of CI of companies and people. The larger your CI is, the more scarce products and resources are available to you. The conventional money still needed to facilitate the exchange of resources and products, but it is limited to such function only, which allows to automate, to simplify, and to computerize the exchange function of money.

The idea of CI is a self-obvious alternative to profit but was not possible to implement until the recent technological advances took place. Some people may like to refer the new concept as multi-dimensional money, which would be a matter of taste.

Here are the key components and features of C-Economy as proposed:

  • A computer network needs to be built to account for all the resources in existence, all the products being produced and all the transactions being executed. Let us refer the whole computerized equipment as “The System” or “C-System.”
  • A “Resource” is anything that exists in nature and has a value for people. All resources are characterized by properties they have, as many as necessary. Newly discovered resources are added to The System as needed. Each Resource has a corresponding record or account in The System. The System maintains the distribution of the resources between the projects or people.
  • The System has an account for all the people, who are, from a technical point of few, a kind of a Resource as well.
  • The System also keeps track of all the “Projects,” which replaces the currently existent notion of “Company.”
  • A Project may be run by a single individual or by a group of people. A project may be as simple as remodeling a house, or as complex as developing and running The Large Hadron Collider, the same way as companies currently are. The difference is that Projects are not profit-oriented, although some people may wish to redefine “profit” and then still consider projects as profit-oriented.
  • All Projects consume resources, the quantity, and kind of which is defined at the time of Project submission. The resources needed for a Project may change over the time. People required to run a Project may also be considered as resources.
  • Most projects produce things, products, and goods at the end, which people and other projects may need to consume.
  • Some projects, like scientific research, for example, do not produce goods, but still, consume resources.
  • The value of resources is measured by a number for the purpose of accounting (former money, price).
  • The number used to measure the value of the resources should be something simple, universal and easy to visualize. For example, an Hour Of Labor of an averaged person might be a good choice. It is equal to the value that an average person can produce within one hour. Let us refer it as HOL. This part is what is similar to the current notion of money.
  • An act of consumption of a resource is recorded in The System as a Transaction. An amount of HOL is subtracted from the account of a consumer in exchange for the resource consumed. Delivering of wood cut for a paper manufacturing facility is an example of a transaction. Taking a pack of cheese from a grocery store by a person is also an example of a transaction. Both get recorded in The System in a similar way.
  • As far as a Transaction is involved, individual people and Projects are not distinctive, they both are simply participants of the transaction recorded.

So far, there is no much difference seen comparing to the currently employed monetary system. Where is the trick? Here it starts:

  • A transaction has the “second dimension,” the importance or significance of it for the people involved. It gets recorded as a number, for example, on -5 to +5 scale, with 0 being neutral. Neutral does not mean bad. It is simply not important to the participant. We can visualize it as a measure of emotions we have when we buy products today. Are you excited? Then put +5. Are you disappointed and disgusted with a bad service at a restaurant? Then put -5. Did you just get a piece of soap, which you use every day and do not care which one it is – put 0. In a way, it is similar to a providing a review for the product you just bought. That is why let us refer to this number as “Review” for now. The numerical range of Review is also subject to possible change in the final version.
  • People do not work for other people. They work on a Project with the people who run the Project, and with other co-workers. Some people may argue that this would be a terminology issue, but anyway, we need to get rid of the notion of employment and replace it with a concept of working on a Project, which emphasizes the equality of rights and equality of importance of all the people. As a side note, this is crucially different from what communist theories considered as equality of people. Only rights can be equal, but not people. People are inherently different, which will always be a case.
  • Account of each individual keeps track of all the transactions through the lifespan. The amount of HOL in person’s possession can be positive or negative with no limit on each end. The System keeps track of all the quantities for all the people and makes a normalizing adjustment from time to time, probably daily, to prevent the numbers from becoming too big or too small. The absolute value of those numbers becomes not very important and would probably not be tracked by a person on a daily basis. Those amounts become an intrinsic property of The System, which is used to facilitate accounting in a crisis-free way still providing the benefits of the simplification of an exchange of goods, resources, and services. The System records the act of a Transaction, which is important, while the actual number attached to the transaction (former price) is only important to The System for accounting purpose, but not very important to the people involved in the transaction.
  • What a person would care about is their Contribution Index (CI), which is the second important number tracked by The System (or the first number, actually, according to the importance).
  • Contribution Index gets increased when
    • A person comes to work on a project on a daily basis.
    • A person receives a positive reference from the project manager or other coworkers.
    • A person works on household chores and other none-project related things. The house chores might be considered as a Project too. These details will be clarified as we develop The System.
    • A person made a piece of art, which was taken by other person or project via a Transaction.
    • And so on, basically, whenever a person contributes to the community in any way – this all must be recorded in the transactions.
  • Contribution Index gets decreased when
    • A person consumes resources. For example:
      • Taking food or goods from a grocery store.
      • Getting a new car.
      • Getting a new computer, a new bed or anything else that is needed in everyday life. It is very similar to today’s buying of goods, but we want to eliminate words “buy” and “sell” as obsolete.
    • A person receives a negative reference from the project manager or a coworker.
    • And so on, basically, whenever a person uses any resource.
  • The System will compute and adjust CI according to the rules programmed in The System by its developers, controlled and approved by a government.
  • Contribution Index of a Project is defined based on CI of all people working on this project and reviews of the Project.

Why is Contribution Index important and relevant? What does depend on CI?

  • Availability of products and resources to a person or a Project. Each resource has a CI availability threshold. Only people with CI above the threshold would be able to order and receive the resource. The numeric value of the threshold is set by The System based on supply and demand and gets updated daily.
  • CI determines your priority for getting products on orders. It applies to both People and Projects.
  • CI replaces profit functionality providing a reasonable and human incentive for people to act. Everyone can start a Project without any restriction, which provides a real freedom. Scarce resources are distributed based on CI of consumers, providing a reasonable and fair distribution. The more one contributes, the more power on getting and controlling the resources they get. Such a scheme was always intuitively desired, but it was never possible to actually implement it since it requires a computer network to keep track of all the transactions and all the resources.
  • CI is taken into account for voting – another very desirable thing, which people never figured out how to implement. Only votes of people who contribute matter. The higher your CI, the more power you have. We would not be interested in the opinion of people who do not contribute since it means that they do not participate in the social life and consequently may not be aware of what is going on. If they do not care to contribute, then we do not care what they think. In a way, they do not exist for the community since they do not interact with the community.
  • People with high CI should be highly respected. We bow to them on the street. The TV tells stories about them first, instead of telling us the crime stories. The top stories will be about who invented what and how a particular person managed to get his CI so high.
  • Crime level should drop, since the main reason to commit a crime is eliminated.

More about Projects.

  • Everyone may start a project, providing a description, schedule, and list of resources needed including people.
  • List of available active Projects is available to people with advanced searching tools. People voluntarily choose to which Project they want to contribute.
  • Project managers select their helpers based on CI or personal references without any restrictions – it is solely their personal and unregulated decision.

To be continued.

 


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